Skip to Content
Stock Analyst Update

Nokia's Rumored Offer for Juniper Is Rich

We find it hard to justify the 43% premium, given significant product overlap between the firms.


CNBC reported late on Nov. 29 that  Nokia (NOK) is in talks to buy Juniper Networks for approximately $16 billion, a hefty 43% premium to its $11.2 billion market capitalization at today’s close. This valuation implies a stock price of approximately $42 per share, levels last seen by Juniper shareholders in February 2011. On the surface, we find it difficult to justify such a transaction for Nokia given significant product overlap in its service provider switching and routing segment. Vice versa, we think a bid of $42 per share would be a good deal for Juniper shareholders if the deal were to come to fruition. We will maintain our $26 fair value estimate for Juniper shares and $5.50 per Nokia U.S. ADR until a definitive deal is reached, if at all.

Strategically, Nokia appears to be targeting Juniper's enterprise switching and routing portfolio, although Alcatel-Lucent (which Nokia acquired in 2016) spun-off its enterprise business in 2014 to China Huaxin. In software, both firms also have competing SDN/NFV products. Potentially, we see some merit in terms of market consolidation, especially in the carrier space. However, we find it hard to justify the premium, given significant product overlaps. Meanwhile, Nokia is still in the midst of the challenging integration of Alcatel-Lucent acquisition, while its core telecom market is in a cyclical decline.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Ilya Kundozerov does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.